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Lourdes Chavez was suffering from dementia and decided to grant her son, Carlos Chavez, the family...

Lourdes Chavez was suffering from dementia and decided to grant her son, Carlos Chavez, the family home. She wrote a contract that stated: “Carlos must care for his mother, Lourdes Chavez, and allow her to stay in the home. If Carlos sells the home, he has to pay his mother Lourdes Chavez $125,000, his brother Tomas Chavez $100,000, and his sister Carmen Chavez $100,000.” Eight years after his mother died, Carlos sold the house. He did not give Tomas or Carmen any of the money.

QUESTION #11: (3 points)

What are Tomas and Carmen to the contract?

QUESTION #12: (3 points)

Is there an issue of capacity here? Why or why not?

QUESTION #13: (4 points)

If Tomas and Carmen sue Carlos, will they likely succeed? Why or why not?

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Answer #1

Tomas and Carmen are third party beneficiaries of the contract.

There is an issue with capacity here. Since Lourdes Chavez is suffering from dementia, she is not capable of entering into a contract without an agency or competent guardian. Thus the contract cannot be legitimized.

If Tomas and Carmen sue Carlos, they will likely succeed because due to Lourdes’ condition, they can easily prove that the contract I invalid. Thus Carlos does not have the right to sell the house.

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